WorksheetsUnderstanding IPOs and FPOs
Total questions: 10
Worksheet time: 5mins
What is the primary purpose of an Initial Public Offering (IPO)?
To repay existing loans
To acquire another company
To raise capital by offering shares to the public
To pay dividends
In a Book Building process, what does the price band indicate?
The fixed price of shares
The minimum and maximum price range for bidding
The market price of shares after listing
The government-determined floor price
What differentiates an FPO from an IPO?
FPO is for new companies, IPO is for listed ones
IPO is done by private companies; FPO by listed companies
IPO is smaller than FPO
FPO has no regulatory oversight
Who can participate in an Offer for Sale (OFS)?
Only retail investors
Only promoters and employees
Promoters and major shareholders to sell shares to the public
Only foreign institutional investors
In book building, the final issue price is determined by ...
The company's board
SEBI
The stock exchange
Investorr bids and book runners' analysis
What is the minimum reservation percentage for retail investors in an IPO?
10%
25%
35%
50%
What is the role of a 'Book Running Lead Manager' (BRLM)?
To regulate the IPO
To price the shares after listing
To manage and underwrite the IPO/FPO process
To buy shares from promoters
In an OFS, what is the typical minimum holding period promoters must satisfy before selling shares?
6 months
1 year
2 years
No such requirement
What does 'anchor investor' mean in an IPO?
An investor who launches the IPO
A small investor who applies on Day 3
A qualified institutional investor who is allotted shares before the issue opens
A retail investor given preference in allocation
What is the maximum investment limit for a retail investor in an IPO as per SEBI rules (as of 2024)?
₹1 lakh
₹2 lakhs
₹5 lakhs
₹10 lakhs
